Old habits die hard

This refers to the editorial ‘The bitter truth’ (July 12). Sugar prices continue to increase across the country mostly due to the ruling party’s poor governance and mismanagement. The sugar crisis is purely an economic problem. However, the government has adopted administrative and legal measures to resolve it. The price of any commodity is heavily influenced by demand and supply curves. It can increase if there is a sudden increase in demand – or a decrease in supply. There was no surge in demand for sugar. The problem was on the supply side. The measures adopted by the government further aggravated the problem. It is also an open secret that sugar production is often underreported by sugar mills to avoid taxes. Previously, the actual supply in the market used to be more than what was indicated by official statistics. During the current sugar crisis, this source of supply also dried up due to investigations against owners and management of many sugar factories. The tirade against the business community – calling producers, traders and successful businessmen ‘profiteers’, ‘hoarders’, and ‘mafia’ – has seriously undermined investment climate in the country. No entrepreneur is ready to risk investment under these circumstances. As such there are no plans for the expansion or establishment of factories in the country.

The government has to take adequate steps to resolve economic problems in an efficient manner. It must create a healthy environment for fair competition in the market.

Abdul Majeed

Islamabad